I write about innovation, careers,and unforgettable personalities. My Forbes magazine cover stories have analyzed Sequoia Capital, LinkedIn, Amazon and Hewlett-Packard. In 1997, while at The Wall Street Journal, I shared in a Pulitzer Prize for national reporting. Along the way, I've written four books: "Merchants of Debt," "Health Against Wealth," "Perfect Enough" and "The Rare Find." Contact me anytime at GCAForbes@gmail.com

CEO By Day, Inventor At Night ... Eureka! The Netflix Envelope

How do great inventions happen? If you’re thinking about American classics such as the patents for power steering, digital cameras or Kevlar bulletproof vests, then your answer involves years of unheralded tinkering by front-line engineers at big companies. But there’s another path.

In Silicon Valley and other hotbeds of software and Internet technology, invention can be part of the CEO’s job, too. Proof is just a browser window away, in the form of a exploration of the U.S. Patent Office’s searchable database. Poke around and you’ll find a wide range of patents held by big-name tech chiefs.

Microsoft’s Steve Ballmer has one. Oracle’s Larry Ellison has four, Google’s Larry Page has six, and Facebook’s Mark Zuckerberg has nine. The late Steve Jobs won more than 300 patents during his lifetime — and more are still being granted after the Apple founder’s death.

Why are tech CEOs so inventive? Tarek Fahmi, a long-time Silicon Valley patent attorney, sees two key factors at play. First, he explains, many current bosses of big tech companies have been there since the earliest days, when they were part of the founding team. The first few months of a company’s existence, he points out, are when a new enterprise needs to stake out its unique edge — if any — versus existing companies. That’s when a lot of patents are likely to be filed.

Even after a tech company has reached some size, Fahmi observes, “a lot of innovation is going to involve user-level features. That’s what CEOs think about in their day job. Those innovations don’t require expensive labs. They can be sketched out on a white board. In fact, you can develop them sufficiently in an hour or two to support a patent application.” So tech CEOs can keep winning their inventors’ credentials by weighing in on various aspects of product design.

A case in point: the Netflix returnable envelope, which conveys DVDs between customers and the movie-rental company. It’s a pretty humble creation. There’s a pouch inside to hold the DVD secure, a perforated opening, and some sticky tape that lets you reseal the package when you’re ready to send it back. A nimble sixth-grader could sketch out those features in a matter of hours.

Nonetheless, a few simple ideas — if they’re the right ones — can prove surprisingly powerful. Netflix’s envelope provided a way to send DVDs back and forth at the lowest possible postage rates, with hardly any risk of getting the discs crushed in the Post Office’s sorting machines. Competitors needed to design slightly different envelopes to achieve the same benefit. “From the standpoint of Netflix’s business, that’s non-trivial,” Fahmi says.

Flip through Patent Office records, and you’ll see that early versions of the Netflix envelope are defined by Patent No. 6,966,484. More recent versions are covered by Patent No. 7,401,727. Netflix CEO Reed Hastings is listed as a co-inventor of both, along with a generous assortment of colleagues who brainstormed or built those envelopes. (The first version required four co-inventors; the next, seven.)

At Apple, many of Steve Jobs’s patents involved design elements of keyboards, user interfaces, phones and media players, rather than the intricate electronic circuitry that made those machines possible. Facebook’s Mark Zuckerberg won his first patent for co-inventing the social network’s “news feed.” Such awards may not require a CEO to do much tinkering in the lab or actual writing of computer code — but they still reinforce the boss’s standing as a leader involved in the details of building a business.

Microsoft founder/chairman Bill Gates and Amazon.com founder/CEO Jeff Bezos caught the patent bug early — and never let go. Gates over the years has won at least 30 patents, including recent ones in areas as diverse as cloud-computing architecture and virtual-reality entertainment. Bezos has won more than 60, spanning areas such as transactions, search and cataloging.

A handful of biotech CEOs are able to stay active as inventors, too, says Vern Norviel, head of the patents and innovation counseling practice at Wilson Sonsini Goodrich & Rosati, a leading Silicon Valley law firm. It’s harder, though, for a CEO to keep doing patent-worthy work in a field where inventions can require hundreds of hours of lab work, rather than an afternoon’s worth of brainstorming at a whiteboard.

Sanjay Mehrotra, CEO of SanDisk, won more than 70 patents earlier in his career, before rising into top management at the maker of flash-memory devices. Mehrotra says the time demands of corporate leadership have been too intense in the past decade for him to continue doing much inventing. “I wish I could still do more,” he says. “It’s part of my DNA.”

Nonetheless, he says, his inventor’s background has proven invaluable in leading the company. “It’s helped me a great deal in understanding the capabilities of our techology, and in assessing the complexities of the challenges ahead,” he explains. “That makes a big difference in determining strategic plans and in managing execution. It becomes easier to focus attention on the right issues.”

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Look closer and you likely will find either the technologies those patents cover aren’t used by them or anyone else, or the CEO was added to a list of the actual creators on the patent appln as a vanity thing -they didn’t actually have anything to do with the invention.

Hmmn. I was fairly skeptical, too, when I first started researching this article. But after reading through a flurry of actual CEO patents, it’s hard to keep that disdain at full strength. The Zuckerberg, Page, Hastings, etc. patents do pertain quite directly to what Facebook, Google and Netflix do. The Steve Ballmer patent is an oddball, but that I think came out of a brief brainstorming exercise at Microsoft that hasn’t been repeated. Bill Gates’s patents hold up much better — they’re a roadmap to Microsoft’s research efforts over the years.

In terms of letting the CEO piggyback other people’s breakthroughs, I think it’s just the opposite. The CEO gets on the patent for being the first to suggest something. After that, it’s up to the other co-filers to do all the hard work to make that idea come to life. CEOs enjoy the power of making their lieutenants do the hard work … but that’s hardly a vanity situation.